Contractor vetting organization USIS accused of defrauding the U.S. government

Contractors are a common expenditure for the United States government, but that doesn’t mean that they’re without their problems. The history books are rife with stories of contractor billing debacles, mismanagement, and security leaks, and the country’s reliance on them has been called into question many times. While Edward Snowden’s trespasses this past summer are the most frequently cited horror story, allegations out this week could serve as the new paradigm for contractors run amok.

On Jan. 23, The Department of Justice alleged in a complaint that US Investigations Services LLC (USIS) -- the contractor the U.S. used to vet other contractors -- submitted incomplete security background checks for payment and defrauded the government of millions.

According to the complaint, more than 660,000 incomplete or incorrect background investigations on potential government contractors and employees were filed since 2010, roughly 40 percent of the cases the company filed with the government. The Wall Street Journal reports that the firm handles up to 45 percent of federal background checks and does so for over 100 agencies.

The issues have sent up red flags not only about the billing practices of the USIS, but also the quality control measures the organization employed in vetting contractors associated with high profile securities incidents. Among those vetted: Snowden and the Washington Navy Boat Yard Shooter Aaron Alexis.

While USIS says that the government did not call into question the quality of those background checks at the time of their submission, court documents indicate a range of sub-standard practices, including collusion among team members to submit incomplete background checks and conspiring to hide its problems during official government audits.

"Flushed everything like a dead goldfish," the complaint quoted one USIS official as writing to two of the company's top quality control officials in 2010.

"The alleged conduct referenced in the civil complaint is contrary to our values and commitment to exceptional service," USIS said in a statement addressing the complaint. "These allegations relate to a small group of individuals over a specific period of time and are inconsistent with the strong service record we have earned since our inception in 1996."